I speculate that: (fed rates)

[jasonjm]

if the fed does not raise rates, and is instead forced to go negative in 2016, like canada is warning about today, and like Europe is already at, bitcoin is going to go HUGE in 2016 - definitely over ATH.

same result if fed raises, and is promptly forced to cut and / or go negative.

Reason? when people start losing money by parking it in a bank, money is going to start looking at every possible other place to park itself, even if 1% of that leaks into bitcoin, it will be massive.

See? It's a called speculation, there are probable events, there are reasons for the thought process and there are possible outcomes.

its not just "I think that bitcoin might get stuck at 400 but if it doesn't it might go higher".....

[r0ach]

You can't go negative interest rates because you're then PAYING people to go into debt LOL.  It's IMPOSSIBLE to do.  Just mentioning they're attempting to do that means the economy has already imploded and you're just waiting for the chairs everyone is sitting on to collapse.  Sure, they can implement that policy, just like they can implement a policy making it illegal to have 2 arms and 2 legs, but you can't force laws and economics that won't function to work.

So yes, the economy has already imploded and we're now just waiting for the Obama speech on TV that everyone's bank account is worth nothing.

[talks_cheep]

You forgot one scenario: the fed keeps the rate as it is. Which is what they've been doing since 2009, at almost 0 (zero) percent. They've been stealing from savers and forcing people to spend their money. Anyway, my point is, what the OP is saying has no bearing on btc price, since the fed is going to raise the rate in less than two weeks. It won't affect btc price much. There's zero connection between the fed's policy and btc. As far as the fed is concerned, btc might as well not exist.

[notme]

As far as the fed is concerned, btc might as well not exist.

While that may be true, I wouldn't assume the converse: "As far as BTC is concerned, the fed might as well not exist."

[tabnloz]

You forgot one scenario: the fed keeps the rate as it is. Which is what they've been doing since 2009, at almost 0 (zero) percent. They've been stealing from savers and forcing people to spend their money. Anyway, my point is, what the OP is saying has no bearing on btc price, since the fed is going to raise the rate in less than two weeks. It won't affect btc price much. There's zero connection between the fed's policy and btc. As far as the fed is concerned, btc might as well not exist.

A rate rise will certainly test bitcoin as an asset, not because of itself, but because a hike potentially has huge ramifications for the global economy.

If the reaction is *bad*, the way I can see a rate rise impacting on btc is that even an small rate rise should see a) outflows from EM's accelerate, back into the USD. EM's sell FX reserves and US treasuries, b) EM USD denominated corporate debt blow up as further currency falls + hike sees interest payable rise, c) junk bond yields rocket & defaults spike (already happening), d) bond markets get real worried (maybe a sovereign debt default somewhere? Turkey, Spain, Brazil?), e) stock markets dump, grasping that the start of a hiking cycle is *real* (cheap money is finished).

This is all deflationary for a US and global economy already fighting deflationary forces. All the incoming capital flows to the USD, making it stronger. Maybe this translates to a booming Dow Jones - the USD will have to park somewhere. In some of these cases btc might dump hard, but as an alternate asset, btc may recover & receive a trickle of cautionary (sidelined) money wishing to exit the fiat superhighway.

In the case of a rise, and the Yuan is further devalued (can remain constant while USD goes up) / capital controls tighten / China breaks peg from appreciating dollar, then perhaps btc will moonshot if you believe in a correlation between cap controls and btc price.

If they go for negative rates, it will only be for the banks to park reserves, not for the people (yet). They want to push banks to lend money, to get the velocity going. But you can't lend if no one wants to borrow.

So will be an interesting month. I think they will raise, for the sake of credibility. But then, they'll only just cut them again next year.

[Vahnt]

There is virtually no chance the Fed does anything other than raise rates this month

Markets have priced it in and the jobs data has strongly suggested a rise is in order. For the Fed to hold back on rising this year would be a massive blow to markets worldwide. If by some miracle it doesn't happen, it's just a postponement until early 2016, but there's certainly no way the U.S would move lower

Canada is a different story because our economy here is heavily dependent on exports of oil and other commodities, which have all taken a massive hit over the past year. U.S economic fundamentals seem at least moderately strong.

[ssmc2]

There's the likely outcome of them raising- .25%. Not enough to cause any significant outcome but enough to kick the can down the road.

[Tmdz]

Maybe some money will start to make its way over to bitcoin but who really knows, some people might get tired of governments manipulating their fiat.  Bitcoin exists to be a currency that feds can not manipulate as they do with fiat.  So it comes down to when some people will get fed up with the fed and look to crypto to safe guard their wealth.

As far as rates the fed is just one big fat bluff and they have been bluffing for months to hold up the Obama administration that the recovery has been a success.  Yellen is getting backed in a corner and even with the weak data is saying DAMN the numbers we must proceed and raise rates to prove that everything is as good as they say.  But Yellen herself herself has said if a recession does happen in the near future she should use the tools that have been successful in the past, QE and 0 rates or even negative rates if they have to.  The fact they held rates at 0 and couldn't raise them in 8 years tells you those tools did not work and recovery is nothing but the us economy on life support kept alive by cheap money.

In short bitcoin will explode once shit really hits the fan but that is likely years away.

[panju1]

There's the likely outcome of them raising- .25%. Not enough to cause any significant outcome but enough to kick the can down the road.

That is the expected outcome, but they could continue with status quo too.
Market won't be too disappointed with such an outcome.

[jasonjm]

You can't go negative interest rates because you're then PAYING people to go into debt LOL.  It's IMPOSSIBLE to do.  Just mentioning they're attempting to do that means the economy has already imploded and you're just waiting for the chairs everyone is sitting on to collapse.  Sure, they can implement that policy, just like they can implement a policy making it illegal to have 2 arms and 2 legs, but you can't force laws and economics that won't function to work.

So yes, the economy has already imploded and we're now just waiting for the Obama speech on TV that everyone's bank account is worth nothing.

are you serious?

Go put your money in a Swiss bank. You have to pay to keep your money in a bank there.

Why? Because it's called NEGATIVE INTEREST RATES.

coming soon to USA.

[jasonjm]

There's the likely outcome of them raising- .25%. Not enough to cause any significant outcome but enough to kick the can down the road.

There is no can kicking anymore. Every 25 bps hike is going to kill emerging markets even more and right now they are in serious trouble. Those markets all buy us goods.

Every 25 bps is equivalent of withdrawing 600 to 800 billion of liquidity from wall Street.

The end game is coming soon.

[r0ach]

You can't go negative interest rates because you're then PAYING people to go into debt LOL.  It's IMPOSSIBLE to do.  Just mentioning they're attempting to do that means the economy has already imploded and you're just waiting for the chairs everyone is sitting on to collapse.  Sure, they can implement that policy, just like they can implement a policy making it illegal to have 2 arms and 2 legs, but you can't force laws and economics that won't function to work.

So yes, the economy has already imploded and we're now just waiting for the Obama speech on TV that everyone's bank account is worth nothing.

are you serious?

Go put your money in a Swiss bank. You have to pay to keep your money in a bank there.

Why? Because it's called NEGATIVE INTEREST RATES.

coming soon to USA.

In your example, the payment could be rationalized as a vault storage fee.  The problem is that if cash is abolished and that model is adapted globally, and money has no place to escape to avoid it, then yes, you're basically paying people to go into debt.  It's not a functional alternative and will collapse quickly.  It would also probably create the biggest Bitcoin bubble imaginable.

[Bamsed]

There are too much money floating around the world, especially after the commodity price drop. People will have more disposable income. So it is OK to Fed to raise the rate.